I understand the hesitation to leave off the information about Form 1099-Q. It may help to note that on the form itself, instructions to the recipient, it reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
The IRS, honestly, has a bit of a hard time determining which taxpayer the form "matches" to in many instances to request information, so it's not very common to get an "audit" concerning this form - although not unheard of (as you have seen from comments here.)
It's our nature, even the nature of my colleagues, to enter the data from all tax forms on our return. Sometimes, though, doing so just complicates things and the way that many of the education tax components intertwine is an example of how that sometimes is the case.
IRS letters rarely come in friendly packaging, and the simple thought of them is rather scary for most of us so, naturally, we want to do everything we can to avoid them! I imagine this to be even truer when it comes to our children's returns.
As Hal_Al pointed out- what you enter into TurboTax doesn't translate into notation on the tax return of "1099-Q entered" if no taxable income ends up on the return, so it won't avoid any IRS inquiry anyway.
Also, keep in mind that since you have receipts and records that show you did spend the 529 plan funds on qualified education expenses, getting a letter from the IRS isn't anything to worry about anyway! All it will "cost" you is a little bit of your time should it happen.
The best thing to do, in my opinion, is to leave off the 1099-Q if you are certain that you have expenses to match 100% of the distribution and just keep your printed copies of those expenses in a folder that is easy to get to for the next three or so years. That way, if you get the dreaded letter from the IRS, it won't take much time for you to dig up the receipts - you will already have them handy. You can make copies, drop them in the mail or fax machine - and be on your way.
Keep in mind, too, that if you do get that letter, TurboTax agents are here to help you respond to it all year long with our Audit Support Guarantee.
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